Atlas Financial Holdings, Inc. (Form: 8-K, Received: 06/20/2013 15:56:14)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 17, 2013

Atlas Financial Holdings, Inc.

(Exact name of registrant as specified in its charter)



Cayman Islands	000-54627	27-5466079
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)



150 NW Point Boulevard Elk Grove Village, IL (Address of principal executive offices)	60007 (Zip Code)

Registrant's telephone number, including area code: (847) 472-6700

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

[ ] Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

[ ] Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On June 17, 2013, Atlas Financial Holdings, Inc. (the “Company”) approved Director Compensation and Stock Ownership Guidelines (the “Guidelines”) which set forth the terms of compensation of directors of the Company. The Guidelines were effective as of June 17, 2013 and, among other things, provide directors, including employee directors (which currently includes the Company's chief executive officer), with the opportunity to receive “matching” equity awards from the Company's 2013 Equity Incentive Plan (the “Plan”).

A director who either directly or indirectly purchases up to $100,000 of stock of the Company on the open market or through the Company's employee stock purchase plan will receive a 3 to 1 matching grant of restricted stock (or for Canadian taxpayers, restricted stock units) based on the aggregate purchase price of shares he or she purchases during the six-month period beginning on June 18, 2013 and ending on December 31, 2013 (the “Purchase Period”). The matching grant will be made as soon as administratively possible after the end of the Purchase Period (the “Grant Date”). The number of shares that will be issued on the Grant Date will be determined by dividing (A) the dollar amount of the Company matching contribution due based on purchases during the Purchase Period by (B) the closing share price of one share of Company common stock at close of market on June 17, 2013 (the “Closing Price”). The restricted stock will vest 20% on each anniversary of the Grant Date, subject to the terms of the Guidelines. The matching grant will subject to all of the terms and conditions of the Plan and applicable grant agreements.

The foregoing description of the Guidelines is a summary only and is qualified in its entirety by reference to the full text of the Guidelines, which are filed as an exhibit to this Form 8‑K and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.



Exhibit Number	Description
10.1	Atlas Financial Holdings, Inc. Director Compensation and Stock Ownership Guidelines

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



Date: June 20, 2013		Atlas Financial Holdings, Inc.

	By:	/s/ Scott Wollney
		Name: Scott Wollney
		Title: President and Chief Executive Officer

Exhibit 10.1

DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES

Effective June 17, 2013 (the “Effective Date”)

The Compensation Committee of the Board of Directors of Atlas Financial Holdings, Inc. (the "Committee") has the responsibility for recommending to the Board the form and amount of compensation for non-employee directors as well as granting incentive compensation awards to certain executive employees. The Board believes that total compensation for directors should be competitive with that paid to directors in the financial services industry. With respect to non-employee directors, a combination of equity and cash is provided to reflect a focus on both (i) long-term performance and shareholder value and (ii) compensation for the Board's continuing oversight and corporate governance role. With respect to employee directors, equity awards encourage growth and financial success of the Company through the investment of future services.

Annual Retainer

Each non-employee, independent director receives an annual cash retainer of $55,000. The Chairman of the Board receives an additional $20,000 retainer.

Committee Chair and Committee Membership Retainer

In addition to the annual retainers, the chair of the Audit Committee (a non-employee, independent director) receives an additional $10,000 retainer for his service as a committee chair.

Upon election to the Board, the retainers are paid quarterly in cash. If a non-employee, independent director is appointed to the Board at any other time than the annual meeting of the stockholders (the "Annual Meeting"), a prorated retainer is paid on the first day of the quarter following the date of appointment.

Other Expenses

The Company reimburses non-employee, independent directors for reasonable and necessary actual travel and out-of-pockets expenses incurred in connection with attendance at Board and committee meetings, as well as other reasonable out-of-pocket expenses incurred in connection with Company business or board activities pursuant to the Company's approved D&O Expense Reimbursement Policy.

Equity Awards

The Board believes that all (non-employee and employee) directors should have a meaningful ownership interest in the company to align their interests with those of our stockholders. Therefore, equity awards shall be made as part of a “matching program.” Equity grants for the directors are intended to compensate them for their role in corporate governance and strategic oversight and are made in the form of restricted stock (or restricted stock units for Canadian taxpayers) “matching” grants from the Atlas Financial Holdings, Inc. 2013 Equity Incentive Plan (the "Plan"). The reasons the Company grants restricted stock are as follows:


•	Restricted stock causes the value of directors' share ownership to rise and fall with that of other stockholders, serving the objective of alignment with shareholder interests.


•	Restricted stock is a prevalent form of director compensation among peer companies.

Restricted stock units (RSUs) are notional securities, equivalent in value to the Company's common stock. Each RSU credited to the holder's RSU account (maintained by the Company) represents the right to receive a payout equal to the fair market value of the Company's common stock. The reasons the Company grants RSUs to Canadian taxpayers, and not restricted stock, are as follows:


•	Like restricted stock, the value of the RSU rises and falls with that of the Company's common stock, serving the objective of alignment with shareholder interests.

•

RSUs are typically structured so that payouts are made within three years following the end of the year in which the RSUs are granted, in order to avoid the salary deferral arrangements under Canadian income tax rules. If structured accordingly, the recipient will be taxable on the full amount of the payout received under the RSU in the year it is received (and not the year in which the RSU is granted).

Equity compensation for directors is established and paid as follows:

•

A director who either directly or indirectly (through a trust the beneficiaries of which is/are either the director or members of his or her immediate family) purchases up to $100,000 of stock of the Company on the open market or through the Company's employee stock purchase plan (the “ESPP”) shall receive a 3 to 1 matching grant of restricted stock (or RSUs, as applicable) based on the aggregate purchase price of shares he or she purchases during the 6 month period beginning on June 18, 2013 and ending on December 31, 2013 (the “Purchase Period”). The matching grant shall be made as soon as administratively possible after the end of the Purchase Period (the “Grant Date,” as defined and subject to the Plan). The number of shares or RSUs that shall be issued on the Grant Date shall be determined by dividing (A) the dollar amount of the Company matching contribution due based on purchases during the Purchase Period by (B) the closing share price of one share of Company common stock at close of market on the Effective Date (the “Closing Price”). For example, if a director purchases an aggregate $50,000 of stock (as determined by the purchase price of the stock on each purchase date) during the Purchase Period, the director will be entitled to a number of shares of restricted stock (or RSUs, as applicable) equal to $150,000 divided by the closing share price of a share of Company stock on the Effective Date. The matching grant will subject to all of the terms and conditions of the Plan and applicable grant agreements as well as the stock purchase obligation set out herein.


•	The restricted stock (or RSUs) will vest 20% on each anniversary of the Grant Date, provided that:


•	The director has maintained ownership of the up to $100,000 investment made to qualify for this incentive for at least one year following the close of the Purchase Period; and


•	the director's service is continuous from the Grant Date through the applicable date upon which vesting is scheduled to occur; and


•	the director has, as of the date upon which vesting is scheduled to occur, not indicated that he or she will not be submitting his or her name for re-election as a director of the Company.

Newly Elected Directors

A newly elected director (i.e. a director elected after the Effective Date), shall be eligible for the “matching program” under the same terms and conditions in this policy, provided, however, that the Purchase Period shall begin on the date of his or her election to the Board, the Purchase Period will continue for six months, and the Effective Date shall be adjusted accordingly. For the purpose of determining the matching grant under these Guidelines, the Closing Price of the common stock shall be based on the price of one share of Company common stock at close of market on the day of the director's starting date with the Company.